Question:

Where does the term 'Credit Crunch' come from?

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Does anyone know where this phrase came from; and why the press aren't calling the economic 'problems' as a downturn or recession ?

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5 ANSWERS


  1. When credit or loans from lending institutions are harder to get due to the economy, things like that are going on now, it is refered to as a crunch.


  2. The concept has been in the economic literature for decades but it use to be called credit rationing but was called a credit crunch in the 90's. It refers to periods when banks and other financial institution  cut back on loans for reasons other than  lack of supply of funds, usually because they feel they need extra liquidity. Economic slowdowns or recessions are the likely result of  credit crunches, but so far we have not seen  negative growth so we are not in a recession although many people are expecting one.

  3. Some smart assed media type with nothing better to do all day than think up a crappy cliche to grab a headline thought it up.

  4. From a chocolate coated confection called "Credit Crunch Bar". It became so expensive people couldn't afford to buy it so it went into liquidation during a recession. The term stuck.

  5. First of all, we are not in a recession. The press has talked people into one so they can get Obama elected. "Credit Crunch" is poor english for banks hesitant to lend to potential borrowers, which is the way it is right now, because they have too many bad loans on the books. Congress made them lend to poor risks with the "Community Investment Act" which required banks to lend to people with poor credit. Now that the poor risks, cannot pay back, we as a nation, have lots of foreclosures.

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